Once upon a time, property in a big village called Riverville was seriously undervalued.
After some not-so-wise elders decided to freeze property values, a wise judge told them they could not.
So the chastened elders hired some wise magicians from a different village to appraise all the property. The new assessments angered many of the householders in Riverville--especially the ones who had lived there for many years and believed that they should not have to pay any more money to support the village that they had stuck with while other villagers had left for warmer villages where the Sun was worshipped.
After much hue and cry, the elders decided to re-assess property every three years rather then every year. At least, they reasoned, they would not have to pay magicians every year and they would not have to listen to villager complaints all year.
One day, some new villagers arrived in Riverville. They bought an old house in a neighborhood called Tree Rodent Vista that was very nice but was in one of the sub-villages (Minister Borough) that was running out of money. The new villagers paid a lot more than the house's appraised value. (They had moved to Riverville from a really expensive village called Boston where every house cost a lot so the house in Minister Borough seemed like a good bargain).
So the elders of Minister Borough (who needed money) asked the elders of Riverville to raise the appraised value to the sale price of the house. The new people grumbled a little but were chastened by the Hearing Walla: "the assessment should reflect fair market value." The new people bowed their heads and accepted that this was a fair doctrine. Nobody likes to pay more in taxes, they said, but it's good that the elders are making sure that everyone pays their fair share.
After three years, along came the day of the new assessment. The magicians were hired and did their work and reported to the Head Elder of Riverville that times were good and houses were worth more. Some people would have to pay more taxes because their houses were worth more. But, they said, assessments should reflect fair market value. Some wise men who chronicled the doings of the village reminded everyone that the sub-villages like Minister Borough and Upper Clarity could reduce their tax rates so people would not be wiped out by the new assessments. The wise chroniclers also pointed out that elderly villagers, living on fixed incomes, could be given larger homestead exemptions. And they also pointed out that annual re-assessments would lead to more gradual and more manageable tax increases for the villagers.
But the Head Elder said no. Rather than make everything fair, he said, he would once again protect the villagers who had lived in the village for a long time. He also wanted to protect all the wealthy villagers. So, he said, after the magicians finish their work, we will limit all increases to 4% at the most. Some assessments would only be increased 1% or 2% or 3%. Some would have no increase at all. But if someone bought a house many years ago and it had steadily increased in value, his assessment would be artificially kept low. If someone had bought property in the last few years and done extensive renovations and increased the value of her property, we will artificially keep that assessment low too. If someone had bought property in a wealthy neighborhood or sub-village and his equity and net worth had gone up drastically in a few years, we will still keep the assessment low. But if someone lives in a poor neighborhood where property values have only crept up, 1% or 2% or 3%--well, that villager must pay his full share of taxes.
The wise chroniclers again pointed out that this was regressive taxation, that this would not solve the long-term problems of the village, that this was unfair to newcomers, that this was arbitrary, and that this was out of step with good government practices across the whole province and the whole empire. But this did not matter to the many happy people who would save money. The happy people forgot that while nobody like to pay taxes, everyone must pay their fair share for civil society to function.
The new people, who had seen their assessment go up 30% RETROACTIVELY TO THE BEGINNING OF THE YEAR of the appeal of the elders of Minister Borough, with the approval of the Hearing Walla, could only shake their heads. They like living in Tree Rodent Vista and Minister Borough but they worry a lot about the village elders.